The Morning Headlamp — Busy week in AK politics and potential job loss looming

More AK jobs at risk. A 2016 economic forecast prepared for the Anchorage Economic Development Corp. projects a loss of 1,600 jobs in Alaska’s largest city, including 600 in the oil and gas sector. Alaska petroleum jobs are expected to follow a national decline because of persistent low prices and global oversupply. For much of 2015, Anchorage had 3,700 people employed by oil companies. By December, that already had fallen by 300, said Bill Popp, president and chief executive officer of the nonprofit group formed to encourage growth and diversity in the Anchorage economy.

In addition to the AEDC report, new analysis from the Alaska Department of Labor showed that in December unemployment claims by former oil and gas industry workers has doubled from the year before. There are now over 1,020 Alaskans who had previously been working in the oil and gas industry collecting unemployment benefits, as compared to 518 in December 2014. As noted in the article, the departure of Shell from Alaska’s Arctic is set to affect 400 jobs in Anchorage alone. Many Alaskan businesses that make up the backbone of the state’s economy are suffering. Following Shell’s exit, ASRC Energy Services Response Operations had to let 30 employees go. ASRC’s general manager, Gary Schliesing, said the situation “is having a devastating impact” on the company’s business operations.

The loss of these jobs will have a trickledown effect across Alaska’s economy. We know that Alaska’s core industry is reeling in the face of exceptionally low oil prices. More job cuts will continue if we don’t encourage our lawmakers to incentivize sustained investment from the private sector. Policies that restrict or dissuade business from believing in AK’s future will naturally leave industry with no choice but to make tough decisions.

AKLNG buoys local economy. According to the Alaska Dispatch News, AKLNG’s industry partners have reportedly acquired more than 150 tracts of land on the Kenai Peninsula as they piece together an expanse that could one day house a massive plant and shore side facility where liquefied natural gas would be processed and exported. The purchases have led to increased activity in the small real-estate market in Nikiski, population 4,500, and the nearby area, said Fred Braun, a broker at Jack White Real Estate in the nearby city of Kenai. “I’d say the LNG project has already been a mini-economic boom to a lot of people,” Braun said. Although the size of the plant is still being determined, Alaska LNG officials have said the large amount of land is needed in part to create a large buffer between the facility and other properties, providing a safe distance that reduces impacts from noise and emissions. Headlamp has stressed the benefits of this megaproject for months. AKLNG, and the billions in investment it represents, will be able to support an Alaskan economy that needs propping up. The boom occurring in Nikiski is a perfect microcosm of the economic impact the megaproject will have. Headlamp hopes the progress made on AKLNG continues in 2016.

A busy week in Juneau. Alaska lawmakers have their work cut out for them this week with several substantive issues to discuss. The focus on Medicaid will shift this week from the Capitol to a courtroom during an ongoing fight over expanded coverage in Alaska. Also, legislators plan to revive a bill calling for the federal government to transfer lands to the state. And a House committee is set to begin reviewing Gov. Bill Walker’s plan to overhaul oil and gas tax credits. On Wednesday, House Resources plans to begin hearing Walker’s proposed tax credit overhaul, which includes raising the minimum tax rate on North Slope oil and not allowing credits to be used to lower the tax rate below the minimum level. The bill repeal certain credits, among other things. Legislators plan to meet this week on bills aimed at curbing and containing costs within Medicaid. Meanwhile, on Thursday, a judge in Anchorage plans to hear arguments in a lawsuit challenging Walker’s authority to expand Medicaid without legislative approval. The Senate Resources Committee on Wednesday plans to hear a bill from House Speaker Mike Chenault calling for the federal government to turn over to the state the title to lands it holds by Jan. 1. The bill would exclude national park lands, land used for military purposes and land to which title is held by a person. Stick with Headlamp this week as we help unpack a very important week in Alaskan politics.

Governor’s fiscal plan lobbyists questionable meetings. According to the Alaska Dispatch News, consultant Art Hackney—contracted by Gov. Bill Walker—has been billing the state for meetings that never took place. Hackney’s invoices include charges for dozens of meetings with lobbyists, business owners and key political figures. But several disputed the details, and one said he never met with Hackney. “I don’t recall having a meeting with Art at all,” said Mike Dubke, another Republican political consultant, based in Virginia.  ADN publisher Alice Rogoff denied ever discussing the Governor’s fiscal plan with Hackeney. Walker, in the phone interview, said he wasn’t intimately involved with the details of Hackney’s work since the consultant didn’t report directly to him.  A KTUU report appeared to dispute this line of events, with Hackney telling KTUU that Rogoff had changed her tune: “I just contacted her, and now she quite clearly remembers.” Rogoff went on to request that KTUU refer to ADN reporter Nat Herz for additional reporting on the story. For now, it is clear that the Governor has retained Hackney, but there is some dispute over whom Hackney met with, and whether he discussed or advocated for the Governor’s fiscal plan. Headlamp is frustrated to hear that not only has Gov. Walker spent money on expensive consultants, but these consultants have been hired to promote a plan which grows state government and imposes new taxes on Alaskans. How will the Alaskan people ever be able to determine if these meetings occurred? Accountability, ethics, trust in government, and the truth matter. Our readers can trust in Headlamp to continue shining a light on this issue. Hopefully more answers – from both Hackney and ADN publisher Rogoff – come to light.

Murkowski spearheads America’s energy future. The first major energy bill in more than eight years is primed for passage in Senate—all thanks to Alaskan Sen. Lisa Murkowski. “I want to change energy policy and you can’t do that without the legislation becoming law,” Murkowski said in an interview last week. “And so not only do we need the support of the House, we need to have the president support it as well.” To make that happen, Murkowski worked with the committee’s top Democrat, Sen. Maria Cantwell of Washington. Murkowski’s pet legislation — to lift the decades-old ban on exporting U.S. crude oil — was introduced separately, and passed along with extended solar and wind tax credits in December as part of the government spending bill. Amendments of interest to Alaska so far include a bill focused on supporting Indian energy, which Murkowski said would help Alaska Natives, and an amendment that encourages new technologies for wastewater treatment, which Murkowski said could be a positive develop for some rural Alaska villages. Headlamp applauds Sen. Murkowski’s ability to reach across the aisle to secure a sustainable energy bill for America. Despite a less than ideal climate to be investing in energy, Sen. Murkowski clearly intends to focus on the future of energy in America. Hopefully Alaska state lawmakers can follow in her footsteps and pass laws that ensure a robust resource development future for Alaska.

 

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First Reads

Alaska LNG snatches up land, buoying a local economy
Alaska Dispatch News, Alex DeMarban, January 31, 2016

Murkowski takes aim at the middle ground on major energy bill
Alaska Dispatch News, Erica Martinson, January 31, 2016

Consultant to Gov. Walker appears to have billed for ‘phantom’ meetings
Alaska Dispatch News, Nathaniel Herz, January 29, 2016

Business group projects 1,600 job loss in Anchorage in 2016
Associated Press, Dan Joling, January 29, 2016

Medicaid lawsuit, tax credit hearings ahead for Alaska lawmakers
Associated Press, Becky Bohrer, January 31, 2016